Rackspace goes on offense against second patent troll in two weeks

Company turns down the opportunity to pay a “very cheap” $75,000 settlement.

Just one week after Rackspace announced it would take on a notorious patent-holding company, the company is at it again. Unwilling to pay a $75,000 demand to a patent troll called Rotatable Technologies, Rackspace is moving to invalidate its patent, No. 6,326,978, by initiating a process at the patent office called an inter partes review.

"The trolls are bringing very flimsy lawsuits looking for quick settlements, and enough is enough," said Rackspace general counsel Alan Schoenbaum in an interview with Ars. "We see patent litigation as a threat to open source software and projects. It's gotten out of hand."

Rotatable has said it's got a patent on the functionality that rotates a screen on a smartphone. That enables it to sue just about any app developer out there, just for calling up a simple functionality used by many apps. Rackspace is being sued over its Rackspace Cloud Notes app for iOS, in a lawsuit that also includes claims again several other Texas companies, including Petroleum Geo-Services, PlainsCapital Bank, Texas Instruments, Schlumberger Technologies, and energy giant TXU. All of those companies have iOS apps which, apparently, rotate their screens.

In a blog post published today, Schoenbaum notes that Rotatable has also sued Apple, Electronic Arts, Whole Foods, and Target.

"They told us they had been instructed by their client to offer a settlement of $75,000 to anyone who contacts them asking for an extension of time," wrote Schoenbaum. "And that the number was negotiable. As patent settlements go, that is very cheap. We also believe it is completely unacceptable."

Rotatable sued Rackspace [Complaint, PDF] in February. The company hopes to put the case on hold while its inter partes review proceeds at the patent office, but that will be up to the court. Such reviews have been available for several years, but it's now somewhat easier to invalidate patents with that process because of changes made in the America Invents Act.

The math of resisting patent demands is quite difficult for defendants. As Schoenbaum's post notes, it can take between $1 million and $5 million to defend a patent case through trial. The company hopes to avoid some of those costs by winning at the patent office, where proceedings will more likely have a cost in the low six figures, Schoenbaum estimates. However, if the review is not successful, the company will have to go ahead and face the litigation.

50 Reader Comments

"The trolls are bringing very flimsy lawsuits looking for quick settlements, and enough is enough," said Rackspace general counsel Alan Schoenbaum in an interview with Ars. "We see patent litigation as a threat to open source software and projects. It's gotten out of hand."

I don't think I've ever wanted to give a standing ovation to an attorney before, but here we are.

OMG. Rackspace is quickly becoming my favorite company. I'm very good at doing research - where can I send in my contact info to volunteer? I have no problem sorting through legal files, patents, prior art, etc etc.

As far as I can see, the patent is preceded by a) adjusting the dimensions of a fullscreen app to reflect monitor orientation, and b) automatically indicating monitor orientation.

Both of these have been supported on PCs for years. Granted b) is rather unusual, but given the static nature of desktop monitors that's unsurprising, and a trivial change.

Yeppers...(dating myself here)....I had this functionality on my desktop monitor in the late 80s. Was doing desktop publishing and had a monitor for looking at stuff in landscape or portrait. Nothing new by just having it on a smaller screen.

As far as I can see, the patent is preceded by a) adjusting the dimensions of a fullscreen app to reflect monitor orientation, and b) automatically indicating monitor orientation.

Both of these have been supported on PCs for years. Granted b) is rather unusual, but given the static nature of desktop monitors that's unsurprising, and a trivial change.

Yeppers...(dating myself here)....I had this functionality on my desktop monitor in the late 80s. Was doing desktop publishing and had a monitor for looking at stuff in landscape or portrait. Nothing new by just having it on a smaller screen.

And thus the continuing idiocy of the entire patent process from top to bottom. If they keep handing out patents for stupidly obvious crap that has already been done repeatedly in the past, you can have nothing but ongoing headaches forever.

Apple would be immune, they could simply get their buddies that used to make Radius? monitors to give them a pass. These monitors could be rotated between landscape and portrait mode and iirc they adjusted the desktop automagically. The patents are from the 80's or so and well past their shelf life. "Its a radius monitor but tiny and on a cell phone" is not novel.

I'm glad Rackspace is taking on this apparent public service task, can't fault them for that. Don't kid yourselves, for the long term, they are creating what will be known as the "Don't fuck with Rackspace" effect. The trolls will end up leaving Rackspace alone, and will just harass everyone else.

If they own this patent, why weren't they doing the proverbial shouting from the rooftops when smartphones first came out?

Or did all the phone makers quietly settle, in which case they are a big part of the problem.

More than likely the "patent" was recently scooped up by the troll, or otherwise discovered via extensive searching. You had better believe that law firms like this all over the country employ legions of paralegals and students to scour patent filings, looking for the low hanging fruit. This is one that probably just popped up recently.

The sad thing is that for every Rackspace there are hundreds if not thousands of companies that just settle. Clearly it is a very lucrative business.

I'm glad Rackspace is taking on this apparent public service task, can't fault them for that. Don't kid yourselves, for the long term, they are creating what will be known as the "Don't fuck with Rackspace" effect. The trolls will end up leaving Rackspace alone, and will just harass everyone else.

Exactly what I was going to say.Rackspace gets good PR x2 (from the likes of us, and by way of warding off other patent trolls).It might cost them some money short term, but in the longer term it will be beneficial as they have to deal with less of this crap, although it may be that patent trolls pick easier targets first and then when they have "secured" their patent they then come after Rackspace later in the game like some companies have done in the past, going up against small fry before attacking the bigger players.

I wonder, could anyone explain to me why patent trolls are allowed to even sue an american developer who is using a framework's functionality? The idea of suing an "end user" is rather unusual to me since German law (my local authority) is bound by a causative principle and restricts such claims to the actual makers of functionality.

I wonder, could anyone explain to me why patent trolls are allowed to even sue an american developer who is using a framework's functionality? The idea of suing an "end user" is rather unusual to me since German law (my local authority) is bound by a causative principle and restricts such claims to the actual makers of functionality.

Under US law any commercial use would be subject to licensing so even in the case where an app was provided as a "free" product if it is ultimately a vehicle to obtain profit it will be deemed commercial use.

I wonder, could anyone explain to me why patent trolls are allowed to even sue an american developer who is using a framework's functionality? The idea of suing an "end user" is rather unusual to me since German law (my local authority) is bound by a causative principle and restricts such claims to the actual makers of functionality.

American patent troll lawyers are suing end users in what is basically a loophole, as the phenomenon is so new that lawmakers haven't had a chance to shut the door on such a blatantly abusive and one-sided process.

Wouldn't Rotable rather just drop the case, if it goes to trial? It costs Rotable a lot of money too, to litigate the case.

Not all lawyers are that smart. Most are wise enough not to pursue what they know is a flimsy argument that only works as a blackmail tool, but some believe their own spiel so much that they will plow ahead and try to break down that brick wall with their own skulls.

American patent troll lawyers are suing end users in what is basically a loophole, as the phenomenon is so new that lawmakers haven't had a chance to shut the door on such a blatantly abusive and one-sided process.

So what you say is, Apple may sue any modern (american) PC user over the use of computer mice because they invented it and basically everyone useses a PCs as commercial vehicle?

As far as I can see, the patent is preceded by a) adjusting the dimensions of a fullscreen app to reflect monitor orientation, and b) automatically indicating monitor orientation.

Both of these have been supported on PCs for years. Granted b) is rather unusual, but given the static nature of desktop monitors that's unsurprising, and a trivial change.

i agree... if apple gets it's 'slide-to-unlock' patent invalided, then this patent will be also... did the patent office miss the prior art section?...

also, the Landscape versus portrait switching mode on an iPad is nifty... So why didn't Apple patent that ?...Apple is the one that made that feature mainstream... could it be because they knew that it was not Patentable?...

American patent troll lawyers are suing end users in what is basically a loophole, as the phenomenon is so new that lawmakers haven't had a chance to shut the door on such a blatantly abusive and one-sided process.

So what you say is, Apple may sue any modern (american) PC user over the use of computer mice because they invented it and basically everyone useses a PCs as commercial vehicle?

Well for one, Apple didn't invent the mouse; Xerox did. A high percentage of Apples' early "technology" was first developed by Xerox.

These patent trolls have names and addresses. Every time a patent troll wants to extort some company, they should just release those details to the interwebs. Hey guys, here's a patent troll. The internet will get these patent trolls to stop.

The real problem is excessively broad and obvious patents to one "skilled in the arts". I was unaware how old some the underlying technology to this patent was. This points out that many "patents" were probably commercialized earlier in an unsuccessful, now forgotten product or were minor features on a successful but now out of production product. In either case most people would be unaware of the feature and between PO incompetence, laziness, and ignorance and "inventor" sleaziness and perjury a patent is issued on an idea that has been around for many years.

Unless and until we get some real patent system reform, one of our best hopes may lie with companies like Rackspace. I wish more companies with relatively deep pockets would stop rolling over and start proactively seeking patent reevaluation and invalidation. Too many are accepting that $75k offer. In a twist to "loser pays", I think reexamination should be mandatory when such claims are filed. If their patent is invalidated, they pay for the reexamination and the defendant's legal fees. Make that the law and the tide would slow, if not turn.

American patent troll lawyers are suing end users in what is basically a loophole, as the phenomenon is so new that lawmakers haven't had a chance to shut the door on such a blatantly abusive and one-sided process.

So what you say is, Apple may sue any modern (american) PC user over the use of computer mice because they invented it and basically everyone useses a PCs as commercial vehicle?

Well for one, Apple didn't invent the mouse; Xerox did. A high percentage of Apples' early "technology" was first developed by Xerox.

USPTO should have to reimburse all legal fees of companies sued for infringement of a patent which is later invalidated. Plus a penalty amount for not doing their jobs correctly. If this happened enough times, the government might realize that the patent office needs more competent examiners and/or shouldn't be operated as a cash cow.

Maybe patent trolls should be forced to refund all money gained via settlement if a patent is invalided.

While it's tempting to agree with that, such an arrangement seems unworkable in practice. When the patent office awards a patent, regardless of how weak its technological underpinnings might be, they're granting the recipient the legal right to go after infringing parties in court. I'm assuming of course that the patent IS actually being infringed - this is becoming less and less clear with 'inventors' attempting to patent ideas without any actual working invention. If the accused party is found not to be infringing, then it makes a lot of sense for the plaintiffs to cover all costs.

Instead, I'd say any settlement money falsely obtained (due to the patent being invalidated later on) should also be covered by the patent office. Time for the government to put money where its mouth is when prattling on about the 'knowledge economy' and the importance of 'intellectual property'.

American patent troll lawyers are suing end users in what is basically a loophole, as the phenomenon is so new that lawmakers haven't had a chance to shut the door on such a blatantly abusive and one-sided process.

So what you say is, Apple may sue any modern (american) PC user over the use of computer mice because they invented it and basically everyone useses a PCs as commercial vehicle?

Well for one, Apple didn't invent the mouse; Xerox did. A high percentage of Apples' early "technology" was first developed by Xerox.

American patent troll lawyers are suing end users in what is basically a loophole, as the phenomenon is so new that lawmakers haven't had a chance to shut the door on such a blatantly abusive and one-sided process.

So what you say is, Apple may sue any modern (american) PC user over the use of computer mice because they invented it and basically everyone useses a PCs as commercial vehicle?

Well for one, Apple didn't invent the mouse; Xerox did. A high percentage of Apples' early "technology" was first developed by Xerox.

A high percentage of ALL Apple technology was first developed by someone else. Apple don't invent things, but are very good at packaging them nicely. Once Apple figured out that the USPTO would grant them patents on any existing invention "on a mobile device" they patented everything they could, based their entire business model around it, and sued anyone that dared point out how obsurd their patents are.